Politico.com: GOP cash woes threaten fall gains

GOP cash woes threaten fall gains

By: Jonathan Martin
August 6, 2010 06:46 PM EDT

KANSAS CITY, Mo. – The Republican National Committee is entering the fall election season with dire financial problems and, to an unprecedented degree, will be forced to rely upon outside groups to fund activities traditionally paid for by the national party.While embattled RNC Chairman Michael Steele and a top aide sought to use the party’s summer meeting here to publicly put the best face on the cash shortage, behind the scenes senior Republicans expressed grave concern that their fundraising deficiencies may be the difference between a good election year and a great one.

With $11 million on hand as of the end of June—and about $2 million in reported debt—the RNC’s paid get-out-the-vote (GOTV) effort will be limited to just targeted House races, POLITICO has learned.

And the committee is only going to be able to spend money on those relatively inexpensive House races thanks to a $10 million line of credit that was approved at the meeting here. Until then, said one incredulous Republican, there was no money available for paid GOTV activities like mailers and automated phone calls.

Even with the line of credit, though, the party can’t afford to assist their many gubernatorial and Senate candidates with any dollars for paid voter contact and will have to effectively outsource that operation.

The expectation – and it’s only that because the party is barred from coordinating with third-party groups – is that the new organizations that have sprung up amid the RNC’s woes will step in to pay for such GOTV efforts in statewide contests.

Senior Republicans are particularly hopeful that the group American Crossroads, founded in part by Karl Rove and Ed Gillespie, is planning to fill the void in turnout funding.

“You’re not going to spend $200,000 on micro-targeting if all you’re doing is TV ads,” said one top GOP operative, alluding to the money American Crossroads has spent so far to identify voters.

POLITICO reported last month that the third-party group has hired veteran Republican strategist Carl Forti to run a micro-targeting effort and, according to a “concept paper,” would spend $15 million on “targeted grassroots advocacy” – paid voter contact.

The RNC will, though, be able to pay for volunteer GOTV activities for the final three months, such as the costs associated with housing and enabling phone banks, and they already have 285 “Victory” offices to carry out such tasks.

Because of laws against coordination, spokesmen for both the RNC and American Crossroads were cagey in describing their efforts.

“We are thrilled they have joined the fight,” said RNC spokesman Doug Heye of the new groups, noting that Democrats have had effective outside groups in previous cycles while Republicans paid a price for not having any such outfits.

“American Crossroads has said from the get-go that we’ll be active in get-out-the-vote,” said spokesman Jonathan Collegio, promising “in-depth voter contact programs in our targeted states and races.”

But the RNC’s cash-flow problems will impact far more than just turnout operations. The RNC has given the two congressional campaign committees, the National Republican Congressional Committee and the National Republican Senatorial Committee, only $2 million each so far this election cycle and top GOP officials tell POLITICO that there isn’t any more available to be transferred.

So as Republicans try to regain control of the House and Senate, they’ll do so with only $4 million of already-spent dollars from the national committee. By contrast, in the 2006 election cycle the RNC transferred a total of over $57 million to the two campaign committees and independent expenditure efforts to help congressional candidates.

The NRCC alone received $17 million from the RNC then. The lack of resources could especially hamper the House Republican effort this year as they are badly trailing their Democratic counterparts financially.

At the state level, the impact of the RNC’s cash shortage is just as acute.

Consider Ohio and Missouri. Both states had hard-fought Senate races in 2006 and will again this election. But the two state parties and their candidates will get significantly less help than they did four years ago, GOP officials tell POLITICO. Ohio got over $5 million from the RNC in 2006—the last midterm election—but is slated to get just over $1 million this year. It’ll be just as bad for Missouri, which will also get just a slice of the $5 million the state received in 2006.

“If our ground game is not funded, it will really be tough,” said Ann Wagner, campaign chair for Senate hopeful Rep. Roy Blunt and a former Missouri GOP state chair and RNC co-chair.

Wagner said that while she was “hopeful” that the RNC would come up with the cash, she was also counting on assistance from other groups outside the party structure.

“It’s going to be a problem if it doesn’t come from somewhere,” she said.

An Ohio Republican said it would have a significant impact on the party’s field operation if they got a fifth of the money they received four years ago.

“I’m hoping that they’ll raise their commitment,” said the Republican.

Asked about concerns from the states about the disparity between what they’re getting this year compared to previous years, Steele declined to answer the question.

“Let’s stop that, it’s not true,” he insisted to reporters here. “Were you watching the presentation?”

Steele was alluding to RNC Chief of Staff Mike Leavitt’s PowerPoint-equipped speech to committee members here Friday morning in which he stressed what they had raised, not had currently available, and repeatedly noted that the party didn’t have a president to help them raise money this year.

Yet as Republicans privately gripe about the committee’s fiscal straits and blame it partly on the rocky stewardship of Steele, there was little appetite here to take after the already-embattled chairman.

Even critics of the gaffe-prone Steele said the final months before such a promising election was not the time to litigate his tenure.

John Sununu, the former New Hampshire governor and the state’s current GOP chair, stood up at a private breakfast on Thursday morning here with Steele present and said that with about 90 days until the election Republicans ought not be trying to hurt the chairman.

That’s because, Sununu said, according to multiple sources in the room, Steele does a pretty good job of hurting himself.

The comment was said somewhat light-heartedly, but it reflects the consensus among high-level GOP officials: avoid criticizing Steele between now and Election Day and make the best of a difficult situation.

“You’ve got to look at the complete picture,” said Mississippi GOP Committeeman Henry Barbour, citing the strong fundraising from groups such as American Crossroads, the Norm Coleman-and-Fred Malek-led American Action Network and the Republican Governors Association. “They’ll help make up any gap that may be there.”

Plus, Barbour noted the more favorable terrain on which the GOP is running this year.

“You always want more money but I’ll take momentum and the climate over more money any time,” agreed Massachusetts GOP Committeeman Ron Kaufman.

But if the GOP comes close but falls just short of recapturing control of the House—widely seen as the more likely of the two chambers to flip—it’ll be in part because they didn’t have the cash.

“Those last 10 or 15 seats [that would hand Republicans the House majority] come down to cash,” said a senior GOP operative. “And the way we’re going now we could be two-point losers instead of one-point winners.”